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Saturday, October 27, 2012

Weekly Outlook for (Oct 29th - Nov 2nd): Dow Jones, S&P500, Nasdaq and VIX

If you remember my alert, the warning sign for crash is arleady "ON" as issued on Oct 6th. The first price target is 1385 followed by 1275. Here a link Last week stock remained flat, so there was no change for the weekly outlook and S&P500 was expected to close this week at 1402 and it closed at 1411 and Dow jones was expected to close at 12981 and it closed at 13107. Click here

Expectation for Oct 29th - Nov 2nd: 
dow jones
Dow Jones weekly outlook.

As seen in this chart, there is wide gap between 50 day ma, and 20 ma  and such gap can lead to big losses in no time on any crash.
For the week Oct (22nd- 26th): Dow jones was down 236 point (-1.77%), S&P500 is down 21 point (-1.48%) and Nasdaq is down 18 point (-0.50%).

For 1 Month: Dow jones is down 306 point(-2.28%), S&P500 is down 21 point(-1.5%) and Nasdaq is down 106 point (-3.5%).

For 3 Month: Dow jones is up 219 point(1.7%), S&P500 is up 52 point(4%) and Nasdaq is up 95 point (3.25%).

For 6 Month: Dow jones is down -97.41 point(-0.74%), S&P500 is up 12 point(1%) and Nasdaq is down  62 point (2%).

For Year to Date: Dow jones is up 889 point(7.28%), S&P500 is up 154 point(12%) and Nasdaq is up 383 point(14.75%)

For 1 Year: Dow jones is up 1298 point(11%), S&P500 is up  174 point (14%) and Nasdaq is up 350 point (13%).

For 5 Year: Dow jones is down 700 point (5.07%), S&P500 is down 123 point(8%) and Nasdaq is up 183 point (6.5%).

Overall, Nasdaq is still winner in 5 year chart inspite of recent sell off in it. 
  1. Japan rate decision: Tuesday.  The Bank of Japan kept interest rates unchanged at 0.10% since December 2008, also maintaining the size of its Asset Purchase Program, as predicted. The BOJ forecasts growth will return upon continued strong domestic demand and improvement in global markets. The major risks remain the EU debt crisis and global uncertainty. No change in rates is expected. However, there is growing talk about an expansion of the QE program by 10 trillion yen, a move that could be big enough to push USD/JPY even higher.
  2. Mario Draghi speaks: Tuesday. Mario Draghi President of the ECB is scheduled to speak in Frankfurt at the Second Conference of the Macro-Prudential Research Network of the European System of Central Banks. He is likely to defend his bond-buying plan to ease the eurozone’s debt crisis. His speech can cause volatility in the market, especially as he references Greece or Spain. Note that also a rate cut is on the cards after his recent warning on deflation.
  3. US CB Consumer Confidence: Tuesday,  American consumers’ sentiment surged to 70.3 in September, the highest level since February, amid a flaw of encouraging data on business conditions. This reading followed an upwardly revised 61.3 score in August. Economists expected a lower reading of 63.1.  a rise to 72.4 is expected now, after the UoM figure is also on the rise.
  4. US ADP Non-Farm Employment Change: Wednesday. The Automatic Data Processing National Employment Report showed that US businesses added 162,000 jobs in September, way above the 145,000 rise predicted, indicating continued expansion in the US market. However despite the positive figures, last month’s reading was revised downward to 189,000 as well as a downward revision in the preceding month. Because of these revisions, the ADP Data failed to cross the 200,000 line since March 2012. A job addition of 139,000 is predicted now.
  5. Canadian GDP: Wednesday. The Canadian economy expanded more than expected in July, rising 0.2% following a 0.1% increase in June, above predictions of a 0.1% growth rate. The overall pace of growth is modest; however in case it exceeds an annualized pace of 2.0% the BOC will have to stop its monetary stimulus to prevent the exhaustion of excess supply. Another 0.2% growth rate is expected this time.
  6. US Unemployment claims: Thursday. The number of initial claims for unemployment benefits dropped 23,000 to a seasonally adjusted 369,000 last week ,  indicating a real improvement in the labor market. The manufacturing sector strengthened in September boosting job creation. A small rise to 371,000 is forecasted.
  7. US ISM Manufacturing PMI: Thursday.US manufacturing PMI climbed better than predicted to 51.5 in September, following 49.6 in August, crossing the 50 point line indicating expansion in the manufacturing sector. New orders edged up from 47.1 to 52.3 while export orders rose from 47.0 to 48.5. A small decline to 51.1 is anticipated now.
  8. Canadian employment data: Friday. Canada’s job market gained 52,100 new jobs in September, surprising economists’ predictions of a 11,700 job increase. September’s sharp rise pushed year-over-year job creation to 175,000. The Canadian job market is much better than its neighbors. Retail and wholesale trade sectors gained 34,000 new jobs, while 29,000 new jobs were created in construction. Meanwhile Unemployment rate edged up to 7.4% in September from 7.3% in the preceding month. However the Canadian work force grew by 7.4%. Analysts predict a job addition of 7,800 jobs and a decline to 7.3% in unemployment rate.
  9. US Non-Farm Employment Change and Unemployment Rate: Friday. The NFP and Unemployment rate readings were favorable for President Obama’s re-election campaign, with 114,000 job addition in September, in line with predictions and a major improvement in the Unemployment rate, down to 7.8% from 8.1% in the previous month, a lot better than the 11.4% rate in the EU. Another improvement to 121,000 is expected now.

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